Not too long ago, it was commonly thought that people shopping for a car would browse on a mobile device but buy in-store or on a desktop computer. After all, the thinking went, who would make a $30,000 purchase on a phone?
More recently, however, there’s been a massive shift to mobile.
“Over the last couple of years, we saw that the majority of our not only traffic, but also purchases happened on mobile devices,” Michia Rohrssen, general manager of Upstart Auto Retail, told PYMNTS. “So, people are now buying $30,000 cars on their phones — no problem.”
“We just consistently year-over-year see more customers going farther down the sales process online or buying the car completely online,” Rohrssen said. “People are just more comfortable with the idea.”
The pandemic has been a boon for U.S. dealers, which reported record profits in 2020 even with reduced staff and a national recession. Nearly 30% of U.S. new car sales last year were completed online, according to Alan Haig, an automotive retail consultant and president of Haig Partners. Before the pandemic, less than 2% of vehicles were purchased digitally.
Traditional automotive dealers are building out their own web presences, offering at-home pickup and delivery services to spare customers the trip to the dealership. Many will allow customers to do paperwork over the internet at their own convenience — in order to address another pain point.
“Globally, we’re aiming for half of all our car sales to be online by 2025,” Anders Gustafsson, president and CEO of Volvo Car USA, told ABC News.
There are also exclusively online auto sellers, such as Carvana and Vroom. These businesses keep very large inventories. Vroom, for example, offers about 14,000 cars. The company also provides 24-hour shopping experiences, allows buyers to do everything online, and it sell cars with a straightforward sticker price.
An hybrid model?
Consulting firm Deloitte’s 2021 Global Automotive Consumer Study found that 71% of American consumers still want to buy in person. The Harris Poll similarly observed that 64% aren’t comfortable buying entirely online.
Car buyers want to complete most or all of their research and paperwork online as well as guide their own financing process. They also want to evaluate extras like extended warranties in a more transparent way and at their own pace. But in-person test drives and close-up evaluations of vehicles are must-haves for many people—and barriers to online shopping.
